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Oliver Kazunga, Senior Business Reporter
LISTED agro-industrial group, Zimplow, says growth in export sales has led to a strong revenue performance in the first half of the year ended 30 June 2019.
The group’s revenue improved by 78 percent to $36,2 million in the first half of the year, according to a statement accompanying the group’s financial results for the period.
Zimplow chairman Mr Thomasmore Chataika said:
“The group’s revenue for the first half of 2019 went up 78 percent from $20,3 million to $36,2 million. Owing to a good working capital posture and sales mix the group benefited from a tailwind on its exports sales.
“The group achieved profit after tax of $15,3 million for the first half of 2019.”
The chairman said the period under review saw significant changes in policy with regards to monetary as well as exchange rate policies. As a result of the above, he said, the diversified divisions and companies in the group have had mixed fortunes. However, the overall performance has been positive.
Demand from tobacco farmers did not come in the same level as last year. However, this was replaced by exports within the overall agriculture demand matrix, said Mr Chataika.
Zimplow’s subsidiaries include Mealie Brand, Farmec, Powermec, CT Bolts, and Barzem.
During the period under review, Mealie Brand had an outstanding performance, which anchored the group’s profitability as revenues for the unit tripled from $3,3 million to $10,3 million.
This was mainly due to sales mix, which was 56 percent of exports and 44 percent local.
“Export sales enabled the division to have exchange gains on its debtors and receipts. The business achieved a profit before tax figure of $9,9 million,” he said.
CT Bolts revenue went up by 77 percent to $1,5 million. However, there has been a change in sales mix with mild steel bolts down 58 percent while high tensile bolts volumes doubled.
“Barzem had a depressed performance over the first half. Revenues came in at $7,4 million. Whole goods sold were down 74 percent on last year while parts sold were up 46 percent. The business posted a profit after tax figure of $1,7 million,” said Mr Chataika.
On the outlook, he said the 2019/20 rainy season was expected to be a normal season and should this be the case, it will be positive for demand for agriculture equipment business.
“We however, remain cautious in our working capital posture to ensure we tie up appropriate capital against anticipated demand,” Mr Chataika said.
Meanwhile, Zimplow has declared an interim dividend of 1,47 cents per share. — @okazunga
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